15 U.S.C. § 78o
The Commission shall grant such registration if the Commission finds that the requirements of this section are satisfied. The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange, if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership. The Commission shall deny such registration if it does not make such a finding or if it finds that if the applicant were so registered, its registration would be subject to suspension or revocation under paragraph (4) of this subsection.
The Commission, by rule, may prescribe reasonable fees and charges to defray its costs in carrying out this paragraph, including, but not limited to, fees for any test administered by it or under its direction. The Commission may cooperate with registered securities associations and national securities exchanges in devising and administering tests and may require registered brokers and dealers and persons associated with such brokers and dealers to pass tests administered by or on behalf of any such association or exchange and to pay such association or exchange reasonable fees or charges to defray the costs incurred by such association or exchange in administering such tests.
For purposes of this subclause, the Commission may by rule modify the dollar figures if the Commission determines that such a modification is necessary or appropriate in the public interest or for the protection of investors.
Each issuer which has filed a registration statement containing an undertaking which is or becomes operative under this subsection as in effect prior to August 20, 1964, and each issuer which shall after such date file a registration statement which has become effective pursuant to the Securities Act of 1933, as amended [15 U.S.C. 77a et seq.], shall file with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors, such supplementary and periodic information, documents, and reports as may be required pursuant to section 78m of this title in respect of a security registered pursuant to section 78l of this title. The duty to file under this subsection shall be automatically suspended if and so long as any issue of securities of such issuer is registered pursuant to section 78l of this title. The duty to file under this subsection shall also be automatically suspended as to any fiscal year, other than the fiscal year within which such registration statement became effective, if, at the beginning of such fiscal year, the securities of each class, other than any class of asset-backed securities, to which the registration statement relates are held of record by less than 300 persons, or, in the case of a bank, a savings and loan holding company (as defined in section 1467a of title 12), or a bank holding company, as such term is defined in section 1841 of title 12, 1,200 persons persons.1 For the purposes of this subsection, the term "class" shall be construed to include all securities of an issuer which are of substantially similar character and the holders of which enjoy substantially similar rights and privileges. The Commission may, for the purpose of this subsection, define by rules and regulations the term "held of record" as it deems necessary or appropriate in the public interest or for the protection of investors in order to prevent circumvention of the provisions of this subsection. Nothing in this subsection shall apply to securities issued by a foreign government or political subdivision thereof.
The Commission may, by rule or regulation, provide for the suspension or termination of the duty to file under this subsection for any class of asset-backed security, on such terms and conditions and for such period or periods as the Commission deems necessary or appropriate in the public interest or for the protection of investors.
The Commission may, for purposes of this subsection, classify issuers and prescribe requirements appropriate for each class of issuers of asset-backed securities.
Every registered broker or dealer shall provide notice to its customers that they may elect not to allow their fully paid securities to be used in connection with short sales. If a broker or dealer uses a customer's securities in connection with short sales, the broker or dealer shall provide notice to its customer that the broker or dealer may receive compensation in connection with lending the customer's securities. The Commission, by rule, as it deems necessary or appropriate in the public interest and for the protection of investors, may prescribe the form, content, time, and manner of delivery of any notice required under this paragraph.
The Commission, by rule, as it deems necessary or appropriate in the public interest and for the protection of investors or to assure equal regulation, may require any member of a national securities exchange not required to register under this section and any person associated with any such member to comply with any provision of this chapter (other than subsection (a)) or the rules or regulations thereunder which by its terms regulates or prohibits any act, practice, or course of business by a "broker or dealer" or "registered broker or dealer" or a "person associated with a broker or dealer," respectively.
Every registered broker or dealer shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of such broker's or dealer's business, to prevent the misuse in violation of this chapter, or the rules or regulations thereunder, of material, nonpublic information by such broker or dealer or any person associated with such broker or dealer. The Commission, as it deems necessary or appropriate in the public interest or for the protection of investors, shall adopt rules or regulations to require specific policies or procedures reasonably designed to prevent misuse in violation of this chapter (or the rules or regulations thereunder) of material, nonpublic information.
No broker or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any penny stock by any customer except in accordance with the requirements of this subsection and the rules and regulations prescribed under this subsection.
Prior to effecting any transaction in any penny stock, a broker or dealer shall give the customer a risk disclosure document that-
The Commission shall adopt rules setting forth additional standards for the disclosure by brokers and dealers to customers of information concerning transactions in penny stocks. Such rules-
The Commission, as it determines consistent with the public interest and the protection of investors, may by rule, regulation, or order exempt in whole or in part, conditionally or unconditionally, any person or class of persons, or any transaction or class of transactions, from the requirements of this subsection. Such exemptions shall include an exemption for brokers and dealers based on the minimal percentage of the broker's or dealer's commissions, commission-equivalents, and markups received from transactions in penny stocks.
It shall be unlawful for any person to violate such rules and regulations as the Commission shall prescribe in the public interest or for the protection of investors or to maintain fair and orderly markets-
No law, rule, regulation, or order, or other administrative action of any State or political subdivision thereof shall establish capital, custody, margin, financial responsibility, making and keeping records, bonding, or financial or operational reporting requirements for brokers, dealers, municipal securities dealers, government securities brokers, or government securities dealers that differ from, or are in addition to, the requirements in those areas established under this chapter. The Commission shall consult periodically the securities commissions (or any agency or office performing like functions) of the States concerning the adequacy of such requirements as established under this chapter.
Except as provided in subparagraph (B), no State or political subdivision thereof may enforce any law, rule, regulation, or other administrative action against a registered funding portal with respect to its business as such.
Subparagraph (A) does not apply with respect to the examination and enforcement of any law, rule, regulation, or administrative action of a State or political subdivision thereof in which the principal place of business of a registered funding portal is located, provided that such law, rule, regulation, or administrative action is not in addition to or different from the requirements for registered funding portals established by the Commission.
For purposes of this paragraph, the term "State" includes the District of Columbia and the territories of the United States.
No law, rule, regulation, or order, or other administrative action of any State or political subdivision thereof may prohibit an associated person of a broker or dealer from effecting a transaction described in paragraph (3)3 for a customer in such State if-
A transaction is described in this paragraph if-
For purposes of subparagraph (A)(i)(II)-
Prior to commencing a rulemaking under this subsection, the Commission shall consult with and seek the concurrence of the Board concerning the imposition of broker or dealer registration requirements with respect to any new hybrid product. In developing and promulgating rules under this subsection, the Commission shall consider the views of the Board, including views with respect to the nature of the new hybrid product; the history, purpose, extent, and appropriateness of the regulation of the new product under the Federal banking laws; and the impact of the proposed rule on the banking industry.
The Commission shall not-
unless the Commission has imposed such requirement by rule or regulation issued in accordance with this section.
The Commission shall not impose a requirement under paragraph (2) of this subsection with respect to any new hybrid product unless the Commission determines that-
In making a determination under paragraph (3), the Commission shall consider-
The Board may obtain review of any final regulation described in paragraph (2) in the United States Court of Appeals for the District of Columbia Circuit by filing in such court, not later than 60 days after the date of publication of the final regulation, a written petition requesting that the regulation be set aside. Any proceeding to challenge any such rule shall be expedited by the Court of Appeals.
A copy of a petition described in subparagraph (A) shall be transmitted as soon as possible by the Clerk of the Court to an officer or employee of the Commission designated for that purpose. Upon receipt of the petition, the Commission shall file with the court the regulation under review and any documents referred to therein, and any other relevant materials prescribed by the court.
On the date of the filing of the petition under subparagraph (A), the court has jurisdiction, which becomes exclusive on the filing of the materials set forth in subparagraph (B), to affirm and enforce or to set aside the regulation at issue.
The court shall determine to affirm and enforce or set aside a regulation of the Commission under this subsection, based on the determination of the court as to whether-
The filing of a petition by the Board pursuant to subparagraph (A) shall operate as a judicial stay, until the date on which the determination of the court is final (including any appeal of such determination).
Any aggrieved party may seek judicial review of the Commission's rulemaking under this subsection pursuant to section 78y of this title.
For purposes of this subsection:
The term "new hybrid product" means a product that-
The term "Board" means the Board of Governors of the Federal Reserve System.
The authority of the Commission under this section with respect to security-based swap agreements shall be subject to the restrictions and limitations of section 78c-1(b) of this title.
In determining whether to permit a foreign person or an affiliate of a foreign person to register as a United States broker or dealer, or succeed to the registration of a United States broker or dealer, the Commission may consider whether, for a foreign person, or an affiliate of a foreign person that presents a risk to the stability of the United States financial system, the home country of the foreign person has adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.
For a foreign person or an affiliate of a foreign person that presents such a risk to the stability of the United States financial system, the Commission may determine to terminate the registration of such foreign person or an affiliate of such foreign person as a broker or dealer in the United States, if the Commission determines that the home country of the foreign person has not adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.
Notwithstanding any other provision of this chapter or the Investment Advisers Act of 1940 [15 U.S.C. 80b-1 et seq.], the Commission may promulgate rules to provide that, with respect to a broker or dealer, when providing personalized investment advice about securities to a retail customer (and such other customers as the Commission may by rule provide), the standard of conduct for such broker or dealer with respect to such customer shall be the same as the standard of conduct applicable to an investment adviser under section 211 of the Investment Advisers Act of 1940 [15 U.S.C. 80b-11] . The receipt of compensation based on commission or other standard compensation for the sale of securities shall not, in and of itself, be considered a violation of such standard applied to a broker or dealer. Nothing in this section shall require a broker or dealer or registered representative to have a continuing duty of care or loyalty to the customer after providing personalized investment advice about securities.
Where a broker or dealer sells only proprietary or other limited range of products, as determined by the Commission, the Commission may by rule require that such broker or dealer provide notice to each retail customer and obtain the consent or acknowledgment of the customer. The sale of only proprietary or other limited range of products by a broker or dealer shall not, in and of itself, be considered a violation of the standard set forth in paragraph (1).
The Commission shall-
The enforcement authority of the Commission with respect to violations of the standard of conduct applicable to a broker or dealer providing personalized investment advice about securities to a retail customer shall include-
the Commission shall seek to prosecute and sanction violators of the standard of conduct applicable to a broker or dealer providing personalized investment advice about securities to a retail customer under this chapter to9 same extent as the Commission prosecutes and sanctions violators of the standard of conduct applicable to an investment advisor under the Investment Advisers Act of 1940 [15 U.S.C. 80b-1 et seq.].
Notwithstanding any other provision of the securities laws, the Commission may issue rules designating documents or information that shall be provided by a broker or dealer to a retail investor before the purchase of an investment product or service by the retail investor.
In developing any rules under paragraph (1), the Commission shall consider whether the rules will promote investor protection, efficiency, competition, and capital formation.
Any documents or information designated under a rule promulgated under paragraph (1) shall-
The Commission, by rule, may prohibit, or impose conditions or limitations on the use of, agreements that require customers or clients of any broker, dealer, or municipal securities dealer to arbitrate any future dispute between them arising under the Federal securities laws, the rules and regulations thereunder, or the rules of a self-regulatory organization if it finds that such prohibition, imposition of conditions, or limitations are in the public interest and for the protection of investors.
1So in original.
2So in original. The word "or" probably should not appear.
3See References in Text note below.
4So in original. There are two subsecs. designated (j).
5Another subsec. (k) is set out after the first subsec. (l).
6Another subsec. (l) is set out after the second subsec. (k).
7Another subsec. (k) is set out after the second subsec. (j).
8Another subsec. (l) is set out after the first subsec. (k).
9So in original. Probably should be followed by "the".
15 U.S.C. § 78o
EDITORIAL NOTES
REFERENCES IN TEXTThis chapter, referred to in subsecs. (b)(2)(B), (C), (3), (4)(A), (D), (E), (11)(B), (12)(B), (13)(D), (c)(3)(B), (8), (f), (g), and (i)(1), was in the original "this title", and this chapter, referred to in subsecs. (k)(1) and (m), was in the original "this Act". See References in Text note set out under section 78a of this title.The Commodity Exchange Act, referred to in subsecs. (b)(4)(B)(ii), (C) to (E) and (c)(3)(B), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.The Securities Act of 1933, referred to in subsecs. (b)(4)(D), (E), (c)(8), and (d)(1), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter 1 (§77a et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77a of this title and Tables. The Investment Advisers Act of 1940, referred to in subsecs. (b)(4)(D), (E), (k)(1), and (m), is title II of act Aug. 22, 1940, ch. 686, 54 Stat. 847, which is classified generally to subchapter II (§80b-1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80b-20 of this title and Tables.The Investment Company Act of 1940, referred to in subsec. (b)(4)(D), (E), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter 1 (§80a-1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80a-51 of this title and Tables.Subsection (i) of section 78q of this title, referred to in subsec. (b)(11)(B)(vi), (12)(B)(vi), was struck out and subsec. (j) was redesignated (i) by Pub. L. 111-203, title VI, §617(a), July 21, 2010, 124 Stat. 1616. Paragraph (3), referred to in subsec. (i)(3), was redesignated as paragraph (4) of subsec. (i) of this section by Pub. L. 112-106, title III, §305(d)(1)(A), Apr. 5, 2012, 126 Stat. 323. Section 206 of the Gramm-Leach-Bliley Act, referred to in subsec. (j)(6)(A)(ii), (iii), is section 206 of Pub. L. 106-102 which is set out as a note under section 78c of this title.
AMENDMENTS2022-Subsec. (b)(13). Pub. L. 117-328 added par. (13). 2015-Subsec. (d). Pub. L. 114-94 substituted "case of a bank, a savings and loan holding company (as defined in section 1467a of title 12)," for "case of bank". 2012-Subsec. (d)(1). Pub. L. 112-106, §601(b), substituted "300 persons, or, in the case of bank or a bank holding company, as such term is defined in section 1841 of title 12, 1,200 persons" for "three hundred".Subsec. (i)(2) to (4). Pub. L. 112-106, §305(d)(1), added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively. 2010-Subsec. (b)(1). Pub. L. 111-203, §985(b)(5)(A)(ii), in concluding provisions, inserted "The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange, if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership." after "are satisfied."Subsec. (b)(1)(B). Pub. L. 111-203, §985(b)(5)(A)(i), struck out "The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership." after "grant or deny such registration." Subsec. (b)(4). Pub. L. 111-203, §975(g)(1), inserted "municipal advisor," after "municipal securities dealer" in subpars. (B)(ii) and (C).Subsec. (b)(4)(C). Pub. L. 111-203, §766(d)(1), inserted "security-based swap dealer, major security-based swap participant," after "government securities dealer,".Subsec. (b)(4)(F). Pub. L. 111-203, §766(d)(2), substituted "broker, dealer, security-based swap dealer, or a major security-based swap participant" for "broker or dealer". Subsec. (b)(6)(A). Pub. L. 111-203, §925(a)(1), substituted ",or bar any such person from being associated with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization," for ",or bar such person from being associated with a broker or dealer," in introductory provisions.Subsec. (c). Pub. L. 111-203, §975(g)(2), inserted "broker, dealer, or" before "municipal securities dealer" in par. (1)(B) and in two places in par. (2)(B). Subsec. (c)(1)(A). Pub. L. 111-203, §929L(3), struck out "otherwise than on a national securities exchange of which it is a member" after "commercial bills)". Pub. L. 111-203, §762(d)(4)(A), struck out "(as defined in section 206B of the Gramm-Leach-Bliley Act)," after "security-based swap agreement". Subsec. (c)(1)(B), (C). Pub. L. 111-203, §762(d)(4)(B), struck out "(as defined in section 206B of the Gramm-Leach-Bliley Act)" after "security-based swap agreement". Subsec. (c)(3)(C). Pub. L. 111-203, §713(a), added subpar. (C).Subsec. (d). Pub. L. 111-203, §942(a), inserted subsec. heading, designated existing provisions as par. (1), inserted par. heading, inserted ",other than any class of asset-backed securities," after "securities of each class", and added par. (2).Subsecs. (e) to (h). Pub. L. 111-203, §929X(c), added subsec. (e) and redesignated former subsecs. (e) to (g) as (f) to (h), respectively. Former subsec. (h) redesignated (i) relating to limitations on State law.Subsec. (i). Pub. L. 111-203, §929X(c)(1), redesignated subsec. (h) as (i). Former subsec. (i), relating to rulemaking to extend requirements to new hybrid products, redesignated (j). Subsec. (j). Pub. L. 111-203, §929X(c)(1), redesignated subsec. (i), relating to rulemaking to extend requirements to new hybrid products, as (j). Pub. L. 111-203, §762(d)(4)(C), (D), redesignated subsec. (i), relating to limitation on Commission authority, as (j) and struck out "(as defined in section 206B of the Gramm-Leach-Bliley Act)" after "security-based swap agreements".Subsecs. (k), (l). Pub. L. 111-203, §913(g)(1), added subsec. (k) relating to standard of conduct and subsec. (l) relating to other matters. Pub. L. 111-203, §173(c), added subsec. (k) relating to registration or succession to a United States broker or dealer and subsec. (l) relating to termination of a United States broker or dealer.Subsec. (m). Pub. L. 111-203, §913(h)(1), added subsec. (m).Subsec. (n). Pub. L. 111-203, §919, added subsec. (n).Subsec. (o). Pub. L. 111-203, §921(a), added subsec. (o). 2006-Subsec. (b)(4)(B)(ii), (C). Pub. L. 109-291 inserted "nationally recognized statistical rating organization," after "transfer agent,". 2002-Subsec. (b)(4)(F). Pub. L. 107-204, §604(a)(1), added subpar. (F) and struck out former subpar. (F) which read as follows: "is subject to an order of the Commission entered pursuant to paragraph (6) of this subsection (b) barring or suspending the right of such person to be associated with a broker or dealer." Subsec. (b)(4)(H). Pub. L. 107-204, §604(a)(2), added subpar. (H).Subsec. (b)(6)(A)(i). Pub. L. 107-204, §604(c)(1)(B)(ii), substituted ",or is subject to an order or finding," for "or omission". Pub. L. 107-204, §604(c)(1)(B)(i), substituted "(H), or (G)" for "or (G)". See 1990 Amendment note for subsec. (b)(6) below. 2000-Subsec. (b)(11). Pub. L. 106-554, §1(a)(5) [title II, §203(a)(1)], added par. (11).Subsec. (b)(12). Pub. L. 106-554, §1(a)(5) [title II, §203(b)], added par. (12).Subsec. (c)(1). Pub. L. 106-554, §1(a)(5) [title III, §303(e)], amended par. (1) generally. Prior to amendment, par. (1) consisted of subpars. (A) to (E) prohibiting use of mails or instrumentality of interstate commerce for transactions in securities by manipulative, deceptive, or other fraudulent device, requiring the Commission, by regulation, to define such devices as manipulative, deceptive or fraudulent, and providing for consultation with the Secretary of the Treasury and other agencies prior to adoption of regulations.Subsec. (c)(3). Pub. L. 106-554, §1(a)(5) [title II, §206(h)], designated existing provisions as subpar. (A) and added subpar. (B).Subsec. (i). Pub. L. 106-554, §1(a)(5) [title III, §303(f)], added subsec. (i) relating to limitation on Commission authority.1999-Subsec. (i). Pub. L. 106-102 added subsec. (i) relating to rulemaking to extend requirements to new hybrid products. 1998-Subsec. (c)(8). Pub. L. 105-353, §301(b)(8)(A), realigned margins.Subsec. (h)(2). Pub. L. 105-353, §301(b)(8)(B), substituted "effecting" for "affecting" in introductory provisions. Subsec. (h)(3)(A)(i)(II)(bb). Pub. L. 105-353, §301(b)(8)(C), inserted "or" after semicolon at end. Subsec. (h)(3)(A)(ii)(I). Pub. L. 105-353, §301(b)(8)(D), substituted "maintained" for "maintains".Subsec. (h)(3)(B)(ii). Pub. L. 105-353, §301(b)(8)(E), substituted "associated" for "association". 1996-Subsec. (h). Pub. L. 104-290 added subsec. (h). 1995-Subsec. (c)(8). Pub. L. 104-67 added par. (8). 1993-Subsec. (b)(1)(B). Pub. L. 103-202, §109(b)(2), inserted "The order granting registration shall not be effective until such broker or dealer has become a member of a registered securities association, or until such broker or dealer has become a member of a national securities exchange if such broker or dealer effects transactions solely on that exchange, unless the Commission has exempted such broker or dealer, by rule or order, from such membership." before "The Commission may extend".Subsec. (b)(7). Pub. L. 103-202, §106(b)(2)(B), inserted "or government securities broker or government securities dealer registered (or required to register) under section 78o-5(a)(1)(A) of this title" after "No registered broker or dealer" in introductory provisions.Subsec. (c)(1). Pub. L. 103-202, §105(b), inserted subpar. designation "(A)" after "(1)", substituted "contrivance." along with subpar. designation "(B)" and "No municipal securities dealer" for "contrivance, and no municipal securities dealer", substituted "contrivance." along with subpar. (C), subpar. designation "(D)" and "The Commission shall" for "contrivance. The Commission shall", and added subpar. (E). Subsec. (c)(2). Pub. L. 103-202, §105(a), inserted subpar. designation "(A)" after "(2)", substituted "fictitious quotation." along with subpar. designation "(B)" and "No municipal securities dealer" for "fictitious quotation, and no municipal securities dealer", substituted "fictitious quotation." along with subpar. (C), subpar. designation "(D)" and "The Commission shall" for "fictitious quotation. The Commission shall", and added subpar. (E).Subsec. (c)(7). Pub. L. 103-202, §110, added par. (7).1990-Subsec. (b)(4)(B). Pub. L. 101-550, §203(a)(1), inserted "or of a substantially equivalent crime by a foreign court of competent jurisdiction" after "misdemeanor". Subsec. (b)(4)(B)(i). Pub. L. 101-550, §203(a)(2), inserted "any substantially equivalent activity however denominated by the laws of the relevant foreign government," after "burglary,".Subsec. (b)(4)(B)(ii). Pub. L. 101-550, §203(a)(3), inserted "foreign person performing a function substantially equivalent to any of the above," after "transfer agent," and "or any substantially equivalent foreign statute or regulation" before semicolon at end.Subsec. (b)(4)(B)(iii). Pub. L. 101-550, §203(a)(4), inserted ",or substantially equivalent activity however denominated by the laws of the relevant foreign government" after "securities".Subsec. (b)(4)(B)(iv). Pub. L. 101-550, §203(a)(5), inserted "or a violation of a substantially equivalent foreign statute" after "title 18".Subsec. (b)(4)(C). Pub. L. 101-550, §203(a)(6), inserted "foreign person performing a function substantially equivalent to any of the above," after "transfer agent,", "or any substantially equivalent foreign statute or regulation" after "Commodity Exchange Act" wherever appearing, and "foreign entity substantially equivalent to any of the above," after "insurance company,".Subsec. (b)(4)(G). Pub. L. 101-550, §203(a)(7), added subpar. (G). Subsec. (b)(6). Pub. L. 101-429, §504(a), amended par. (6) generally. Prior to amendment, par. (6) read as follows: "The Commission, by order, shall censure or place limitations on the activities or functions of any person associated, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated with a broker or dealer, or suspend for a period not exceeding twelve months or bar any such person from being associated with a broker or dealer, if the Commission finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or bar is in the public interest and that such person has committed or omitted any act or omission enumerated in subparagraph (A), (D), (E), or (G) of paragraph (4) of this subsection, has been convicted of any offense specified in subparagraph (B) of said paragraph (4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of said paragraph (4). It shall be unlawful for any person as to whom such an order suspending or barring him from being associated with a broker or dealer is in effect willfully to become, or to be, associated with a broker or dealer without the consent of the Commission, and it shall be unlawful for any broker or dealer to permit such a person to become, or remain, a person associated with him without the consent of the Commission, if such broker or dealer knew, or in the exercise of reasonable care should have known, of such order." Pub. L. 101-550, §203(c)(1), which directed amendment of subsec. (b)(6) by substituting "(A), (D), (E), or (G)" for "(A), (D), or (E)", was executed by making the substitution both before and after the general amendment of subsec. (b)(6) by Pub. L. 101-429, §504(a), which was effective 12 months after Oct. 15, 1990, to reflect the probable intent of Congress and the subsequent amendment by Pub. L. 107-204, §604(c)(1)(B)(i), which presumed that the substitution had taken place.Subsec. (g). Pub. L. 101-429, §505, added subsec. (g).1988-Subsec. (f). Pub. L. 100-704 added subsec. (f). 1987-Subsec. (b)(4)(B)(ii). Pub. L. 100-181, §317(1), substituted "fiduciary, transfer agent, or" for "fiduciary, or any". Subsec. (b)(4)(C). Pub. L. 100-181, §317(2), added subpar. (C) and struck out former subpar. (C) which read as follows: "is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, dealer, entity or person required to be registered under the Commodity Exchange Act, municipal securities dealer, government securities broker, or government securities dealer, or as an affiliated person or employee of any investment company, bank, entity or person required to be registered under such Act, or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security."Subsec. (b)(6). Pub. L. 100-181, §317(3), substituted "seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated" for "or seeking to become associated," in first sentence.Subsec. (b)(10). Pub. L. 100-181, §317(4), substituted "78q-1(b)(4)(A)" for "78q-1(b)(4)(B)". 1986-Subsec. (b)(4)(A). Pub. L. 99-571, §102(e)(1), inserted "or with any other appropriate regulatory agency".Subsec. (b)(4)(B)(ii). Pub. L. 99-571, §102(e)(2), inserted "government securities broker, government securities dealer,". Subsec. (b)(4)(C). Pub. L. 99-571, §102(e)(3), substituted "municipal securities dealer, government securities broker, or government securities dealer," for "or municipal securities dealer,". Subsec. (b)(8). Pub. L. 99-571, §102(e)(4), substituted "any registered broker or dealer" for "any broker or dealer required to register pursuant to this chapter" and struck out "an exempted security" after "other than".Subsec. (c)(3). Pub. L. 99-571, §102(f), inserted "(other than a government securities broker or government securities dealer, except a registered broker or dealer)" and "(except a government security)".1984-Subsec. (b)(4)(B)(ii). Pub. L. 98-376, §6(b)(1), substituted "fiduciary, or any entity or person required to be registered under the Commodity Exchange Act (7 U.S.C. 1 et seq.)" for "or fiduciary".Subsec. (b)(4)(C). Pub. L. 98-376, §6(b)(2), inserted "entity or person required to be registered under the Commodity Exchange Act," and "entity or person required to be registered under such Act". Subsec. (b)(4)(D), (E). Pub. L. 98-376, §6(b)(3), inserted "the Commodity Exchange Act,".Subsec. (c)(4). Pub. L. 98-376, §4, inserted reference to section 78n of this title and "and any person who was a cause of the failure to comply due to an act or omission the person knew or should have known would contribute to the failure to comply,". 1983-Subsec. (b)(8). Pub. L. 98-38, §3(a)(1), added par. (8) and struck out former par. (8), which had directed that, in addition to the fees and charges authorized by par. (7) of this subsection, each registered broker or dealer not a member of a registered securities association pay to the Commission such reasonable fees and charges as necessary to defray the costs of the additional regulatory duties required to be performed by the Commission because such broker or dealer effected transactions in securities otherwise than on a national securities exchange of which it was a member and was not a member of a registered securities association, and that the Commission, by rule, establish such fees and charges.Subsec. (b)(9). Pub. L. 98-38, §3(a)(2), added par. (9) and struck out former par. (9), which had provided that no broker or dealer subject to par. (8) of this subsection could effect any transaction in, or induce the purchase or sale of, any security (otherwise than on a national securities exchange of which it was a member) in contravention of such rules and regulations as the Commission might prescribe designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 1977-Subsec. (d). Pub. L. 95-213 authorized the Commission to define, for purposes of this subsection, term "held of record". 1975- Pub. L. 94-29, §11(1), amended section catchline.Subsec. (a). Pub. L. 94-29, §11(2), required registration with the Commission of all persons utilizing an exchange's facilities to effect transactions.Subsec. (b). Pub. L. 94-29, §11(2), expanded coverage to include municipal securities dealers, permitted nonbank municipal securities dealers and brokers to register company departments or divisions conducting municipal securities activities rather than the company of which the department or division is a part, subjected municipal securities and associated persons thereof to the Commission's enforcement and disciplinary powers, updated the list of statutory offenses which bar a person from becoming a broker-dealer or an associated person of a broker-dealer, expanded Commission regulatory control to include all brokers and dealers executing transactions on exchanges of which such brokers and dealers are not members, required any registered broker-dealer who is not a member of a registered securities association to pay the Commission fees imposed by it to defray the costs of the additional regulatory duties to be performed by the Commission, and clarified the power of national securities exchanges, registered securities associations, and registered clearing agencies to make determinations as to whether a person is subject to statutory disqualification.Subsec. (c)(1). Pub. L. 94-29, §11(3), expanded the Commission's authority to define devices, contrivances, acts, and practices deemed manipulative, deceptive, and otherwise fraudulent for municipal securities dealers as well as for brokers and dealers. Subsec. (c)(2). Pub. L. 94-29, §11(3), expanded the Commission's authority to define quotations deemed to be fictitious for municipal securities dealers as well as for brokers and dealers. Subsec. (c)(3). Pub. L. 94-29, §11(3), inserted requirement that rules and regulations be promulgated no later than Sept. 1, 1975, establishing minimum financial responsibility requirements for all brokers and dealers. Subsec. (c)(5). Pub. L. 94-29, §11(4), substituted provisions authorizing the Commission to regulate trading activities of market makers other than specialists registered on a national securities exchange for provisions authorizing the Commission summarily to suspend trading, otherwise than on a national securities exchange, in any security other than an exempted security for a period not exceeding 10 days if the public interest and the protection of investors so requires.Subsec. (c)(6). Pub. L. 94-29, §11(5), added par. (6).Subsec. (e). Pub. L. 94-29, §11(6), added subsec. (e). 1970-Subsec. (c)(3). Pub. L. 91-598 extended Commission's rulemaking power to both the exchange and the over-the-counter markets, striking out "otherwise than on a national securities exchange" before "in contravention of such rules and regulations" and substituting "shall prescribe" for "may prescribe" and provided for safeguards with respect to the related practices of brokers and dealers, including customers' securities and customers' deposits or credit balances, and maintenance of reserves with respect to such deposits or credit balances. 1964-Subsec. (a). Pub. L. 88-467, §6(a), designated existing provisions as par. (1) and added par. (2). Subsec. (b)(1). Pub. L. 88-467, §6(b), designated first par. as (1) and substituted "persons associated with such broker or dealer" for "person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such broker or dealer,". Subsec. (b)(2). Pub. L. 88-467, §6(b), designated second par. as (2) and substituted "associated with the applicant" for "directly or indirectly controlling or controlled by, or under direct or indirect common control with, the applicant".Subsec. (b)(3). Pub. L. 88-467, §6(b), designated third par. as (3) and substituted "effective date of the registration" for "effective date thereof".Subsec. (b)(4). Pub. L. 88-467, §6(b), added par. (4).Subsec. (b)(5). Pub. L. 88-467, §6(b), designated first sentence of fourth par, as (5), provided for censure and for suspension for period not exceeding twelve months, substituted the language "that such broker or dealer, whether prior or subsequent to becoming such, or any person associated with such broker or dealer, whether prior or subsequent to becoming so associated" for "that (1) such broker or dealer whether prior or subsequent to becoming such, or (2) any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), or any person directly or indirectly controlling or controlled by such broker or dealer, whether prior or subsequent to becoming such", substituted in clause (A) the provision respecting false or misleading statements in any report required to, be filed with the Commission for such statements in any document supplemental to application for registration and inserted in such clause (A) the material fact omission provision, designated existing provisions of clause (B) as items (i) and (ii), included in item (ii) the business of investment broker, and added items (iii) and (iv), provided in clause (C) for enjoyment from acting as an investment adviser, underwriter, broker, or dealer, or as an affiliated person or employee of any investment company, bank, or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, made clause (D) applicable to violations of the Investment Advisers Act of 1940 and the Investment Company Act of 1940, and added clauses (E) and (F). Subsec. (b)(6). Pub. L. 88-467, §6(b), designated second through fifth sentences of fourth par. as (6) and, in provision constituting first sentence of par. (6) substituted "any registration under this subsection" for "any such registration" and inserted "(which may consist solely of affidavits and oral argument)" after "opportunity for hearing".Subsec. (b)(7) to (10). Pub. L. 88-467, §6(b), added pars. (7) to (10).Subsec. (c)(4), (5). Pub. L. 88-467, §6(c), added pars. (4) and (5).Subsec. (d). Pub. L. 88-467, §6(d), substituted provisions which require every issuer filing a registration statement under the Securities Act of 1933 to file for the fiscal year in which the registration statement becomes effective such reports as may be required by the Commission under section 78m of this title and provide for suspension of duty to file reports for any later fiscal years if at the beginning of such fiscal year the securities to which the registration statement relates are held of record by less than three hundred persons for former provisions which required the registration statement filed under the Securities Act to contain an undertaking if the value of the securities offered plus the value of other outstanding securities of the same class amounted to $2,000,000 or more and suspended the duty to file if the value of securities outstanding was reduced to less than $1,000,000 or the issuer had become subject to an equivalent reporting requirement and deleted "or to any other security which the Commission may by rules and regulations exempt as not comprehended within the purposes of this subsection" after "political subdivision thereof". 1938-Subsec. (c)(2), (3). Act June 25, 1938, added pars. (2) and (3). 1936-Act May 27, 1936, amended section generally.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2022 AMENDMENT Pub. L. 117-328 div. AA, title V, §501(b), Dec. 29, 2022, 136 Stat. 5542, provided that: "This section [amending this section] and any amendment made by this section shall take effect on the date that is 90 days after the date of enactment of this Act [Dec. 29, 2022]."
EFFECTIVE DATE OF 2010 AMENDMENT Amendment by sections 173(c), 913(g)(1), (h)(1), 919, 921(a), 925(a)(1), 929L(3), 929X(c), 942(a), and 985(b)(5)(A) of Pub. L. 111-203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111-203 set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.Amendment by section 713(a) of Pub. L. 111-203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§711-754) of title VII of Pub. L. 111-203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111-203 set out as a note under section 1a of Title 7, Agriculture.Amendment by sections 762(d)(4) and 766(d) of Pub. L. 111-203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle B (§§761-774) of title VII of Pub. L. 111-203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle B, see section 774 of Pub. L. 111-203 set out as a note under section 77b of this title. Pub. L. 111-203, title IX, §975(i), July 21, 2010, 124 Stat. 1923, provided that: "This section [amending this section and sections 78o-3, 78o-4, and 78q of this title], and the amendments made by this section, shall take effect on October 1, 2010."
EFFECTIVE DATE OF 1999 AMENDMENT Amendment by Pub. L. 106-102 effective at the end of the 18-month period beginning on Nov. 12, 1999, see section 209 of Pub. L. 106-102 set out as a note under section 1828 of Title 12, Banks and Banking.
EFFECTIVE DATE OF 1995 AMENDMENT Amendment by Pub. L. 104-67 not to affect or apply to any private action arising under this chapter or title I of the Securities Act of 1933 (15 U.S.C. 77a et seq.), commenced before and pending on Dec. 22, 1995, see section 108 of Pub. L. 104-67 set out as a note under section 77l of this title.
EFFECTIVE DATE OF 1990 AMENDMENT Amendment by section 504(a) of Pub. L. 101-429 effective 12 months after Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(2), (3)(A) of Pub. L. 101-429 set out in a note under section 77g of this title.Amendment by section 505 of Pub. L. 101-429 effective 18 months after Oct. 15, 1990, with provision to commence rulemaking proceedings to implement such amendment not later than 180 days after Oct. 15, 1990, and with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(2), (3)(B), (C) of Pub. L. 101-429 set out in a note under section 77g of this title.
EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100-704, §9, Nov. 19, 1988, 102 Stat. 4684, provided that: "The amendments made by this Act [enacting sections 78t-1, 78u-1, and 80b-4a of this title and amending this section and sections 78c, 78u, 78ff, and 78kk of this title], except for section 6 [amending sections 78c and 78u of this title], shall not apply to any actions occurring before the date of enactment of this Act [Nov. 19, 1988]."
EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99-571 effective 270 days after Oct. 28, 1986, see section 401 of Pub. L. 99-571 set out as an Effective Date note under section 78o-5 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98-376 effective Aug. 10, 1984, see section 7 of Pub. L. 98-376 set out as a note under section 78c of this title.
EFFECTIVE DATE OF 1983 AMENDMENT Pub. L. 98-38, §3(b), June 6, 1983, 97 Stat. 207, provided that: "The amendments made by subsection (a) [amending this section] shall become effective six months after the date of enactment of this Act [June 6, 1983]."
EFFECTIVE DATE OF 1975 AMENDMENT Amendment by Pub. L. 94-29 effective June 4, 1975, except for amendment of subsec. (a) by Pub. L. 94-29 which is effective 180 days after June 4, 1975, see section 31(a) of Pub. L. 94-29 set out as a note under section 78b of this title.
EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88-467 of subsec. (a) of this section effective July 1, 1964, and of subsecs. (b), (c)(4), (5), and (d) of this section effective Aug. 20, 1964, see section 13 of Pub. L. 88-467 set out as a note under section 78c of this title.
CONSTRUCTION OF 1995 AMENDMENT Nothing in amendment by Pub. L. 104-67 to be deemed to create or ratify any implied right of action, or to prevent Commission, by rule or regulation, from restricting or otherwise regulating private actions under this chapter, see section 203 of Pub. L. 104-67 set out as a Construction note under section 78j-1 of this title.
CONSTRUCTION OF 1993 AMENDMENTAmendment by sections 105, 106(b)(2)(B), and 109(b)(2) of Pub. L. 103-202 not to be construed to govern initial issuance of any public debt obligation or to grant any authority to (or extend any authority of) the Securities and Exchange Commission, any appropriate regulatory agency, or a self-regulatory organization to prescribe any procedure, term, or condition of such initial issuance, to promulgate any rule or regulation governing such initial issuance, or to otherwise regulate in any manner such initial issuance, see section 111 of Pub. L. 103-202 set out as a note under section 78o-5 of this title.
STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS, DEALERS, AND INVESTMENT ADVISERS Pub. L. 111-203, title IX, §913(a)-(f), July 21, 2010, 124 Stat. 1824-1827, provided that: "(a) DEFINITION.-For purposes of this section, the term 'retail customer' means a natural person, or the legal representative of such natural person, who-"(1) receives personalized investment advice about securities from a broker or dealer or investment adviser; and "(2) uses such advice primarily for personal, family, or household purposes."(b) STUDY.-The Commission shall conduct a study to evaluate-"(1) the effectiveness of existing legal or regulatory standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice and recommendations about securities to retail customers imposed by the Commission and a national securities association, and other Federal and State legal or regulatory standards; and "(2) whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice about securities to retail customers that should be addressed by rule or statute."(c) CONSIDERATIONS.-In conducting the study required under subsection (b), the Commission shall consider- "(1) the effectiveness of existing legal or regulatory standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice and recommendations about securities to retail customers imposed by the Commission and a national securities association, and other Federal and State legal or regulatory standards;"(2) whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice about securities to retail customers that should be addressed by rule or statute;"(3) whether retail customers understand that there are different standards of care applicable to brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers in the provision of personalized investment advice about securities to retail customers;"(4) whether the existence of different standards of care applicable to brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers is a source of confusion for retail customers regarding the quality of personalized investment advice that retail customers receive;"(5) the regulatory, examination, and enforcement resources devoted to, and activities of, the Commission, the States, and a national securities association to enforce the standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers when providing personalized investment advice and recommendations about securities to retail customers, including- "(A) the effectiveness of the examinations of brokers, dealers, and investment advisers in determining compliance with regulations; "(B) the frequency of the examinations; and"(C) the length of time of the examinations;"(6) the substantive differences in the regulation of brokers, dealers, and investment advisers, when providing personalized investment advice and recommendations about securities to retail customers;"(7) the specific instances related to the provision of personalized investment advice about securities in which-"(A) the regulation and oversight of investment advisers provide greater protection to retail customers than the regulation and oversight of brokers and dealers; and"(B) the regulation and oversight of brokers and dealers provide greater protection to retail customers than the regulation and oversight of investment advisers; "(8) the existing legal or regulatory standards of State securities regulators and other regulators intended to protect retail customers; "(9) the potential impact on retail customers, including the potential impact on access of retail customers to the range of products and services offered by brokers and dealers, of imposing upon brokers, dealers, and persons associated with brokers or dealers-"(A) the standard of care applied under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) for providing personalized investment advice about securities to retail customers of investment advisers, as interpreted by the Commission and the courts; and"(B) other requirements of the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.); "(10) the potential impact of eliminating the broker and dealer exclusion from the definition of 'investment adviser' under section 202(a)(11)(C) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)(C)), in terms of-"(A) the impact and potential benefits and harm to retail customers that could result from such a change, including any potential impact on access to personalized investment advice and recommendations about securities to retail customers or the availability of such advice and recommendations;"(B) the number of additional entities and individuals that would be required to register under, or become subject to, the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), and the additional requirements to which brokers, dealers, and persons associated with brokers and dealers would become subject, including-"(i) any potential additional associated person licensing, registration, and examination requirements; and "(ii) the additional costs, if any, to the additional entities and individuals; and"(C) the impact on Commission and State resources to-"(i) conduct examinations of registered investment advisers and the representatives of registered investment advisers, including the impact on the examination cycle; and"(ii) enforce the standard of care and other applicable requirements imposed under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.); "(11) the varying level of services provided by brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers to retail customers and the varying scope and terms of retail customer relationships of brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers with such retail customers;"(12) the potential impact upon retail customers that could result from potential changes in the regulatory requirements or legal standards of care affecting brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers relating to their obligations to retail customers regarding the provision of investment advice, including any potential impact on-"(A) protection from fraud;"(B) access to personalized investment advice, and recommendations about securities to retail customers; or"(C) the availability of such advice and recommendations;"(13) the potential additional costs and expenses to-"(A) retail customers regarding and the potential impact on the profitability of their investment decisions; and"(B) brokers, dealers, and investment advisers resulting from potential changes in the regulatory requirements or legal standards affecting brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers relating to their obligations, including duty of care, to retail customers; and "(14) any other consideration that the Commission considers necessary and appropriate in determining whether to conduct a rulemaking under subsection (f)."(d) REPORT.-"(1) IN GENERAL.-Not later than 6 months after the date of enactment of this Act [July 21, 2010], the Commission shall submit a report on the study required under subsection (b) to-"(A) the Committee on Banking, Housing, and Urban Affairs of the Senate; and"(B) the Committee on Financial Services of the House of Representatives."(2) CONTENT REQUIREMENTS.-The report required under paragraph (1) shall describe the findings, conclusions, and recommendations of the Commission from the study required under subsection (b), including-"(A) a description of the considerations, analysis, and public and industry input that the Commission considered, as required under subsection (b), to make such findings, conclusions, and policy recommendations; and"(B) an analysis of whether [sic] any identified legal or regulatory gaps, shortcomings, or overlap in legal or regulatory standards in the protection of retail customers relating to the standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice about securities to retail customers."(e) PUBLIC COMMENT.-The Commission shall seek and consider public input, comments, and data in order to prepare the report required under subsection (d)."(f) RULEMAKING.-The Commission may commence a rulemaking, as necessary or appropriate in the public interest and for the protection of retail customers (and such other customers as the Commission may by rule provide), to address the legal or regulatory standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice about securities to such retail customers. The Commission shall consider the findings[,] conclusions, and recommendations of the study required under subsection (b)." [For definitions of terms used in section 913(a)-(f) of Pub. L. 111-203 set out above, see section 5301 of Title 12, Banks and Banking.]
STUDY AND REPORT ON BROKER-DEALER UNIFORMITY Pub. L. 104-290, title V, §510(d), Oct. 11, 1996, 110 Stat. 3451, provided that:"(1) STUDY.-The Commission, after consultation with registered securities associations, national securities exchanges, and States, shall conduct a study of the impact of disparate State licensing requirements on associated persons of registered brokers or dealers and methods for States to attain uniform licensing requirements for such persons. "(2) REPORT.-Not later than 1 year after the date of enactment of this Act [Oct. 11, 1996], the Commission shall submit to the Congress a report on the study conducted under paragraph (1). Such report shall include recommendations concerning appropriate methods described in paragraph (1)(B), including any necessary legislative changes to implement such recommendations."
PENNY STOCK REFORM; CONGRESSIONAL STATEMENT OF FINDINGS Pub. L. 101-429, title V, §502, Oct. 15, 1990, 104 Stat. 951, provided that: "The Congress finds the following: "(1) The maintenance of an honest and healthy primary and secondary market for securities offerings is essential to enhancing long-term capital formation and economic growth and providing legitimate investment opportunities for individuals and institutions. "(2) Protecting investors in new securities is a critical component in the maintenance of an honest and healthy market for such securities. "(3) Protecting issuers of new securities and promoting the capital formation process on behalf of small companies are fundamental concerns in maintaining a strong economy and viable trading markets."(4) Unscrupulous market practices and market participants have pervaded the 'penny stock' market with an overwhelming amount of fraud and abuse. "(5) Although the Securities and Exchange Commission, State securities regulators, and securities self-regulators have made efforts to curb these abusive and harmful practices, the penny stock market still lacks an adequate and sufficient regulatory structure, particularly in comparison to the structure for overseeing trading in National Market System securities."(6) Investors in the penny stock market suffer from a serious lack of adequate information concerning price and volume of penny stock transactions, the nature of this market, and the specific securities in which they are investing. "(7) Current practices do not adequately regulate the role of 'promoters' and 'consultants' in the penny stock market, and many professionals who have been banned from the securities markets have ended up in promoter and consultant roles, contributing substantially to fraudulent and abusive schemes."(8) The present regulatory environment has permitted the ascendancy of the use of particular market practices, such as 'reverse mergers' with shell corporations and 'blank check' offerings, which are used to facilitate manipulation schemes and harm investors. "(9) In light of the substantial and continuing problems in the penny stock markets, additional legislative measures are necessary and appropriate."
REVISION OF SANCTION AUTHORITY WITH RESPECT TO PENNY STOCKS; RECOMMENDATIONS TO CONGRESS Pub. L. 101-429, title V, §504(b), Oct. 15, 1990, 104 Stat. 953, provided that within 6 months after Oct. 15, 1990, the Securities and Exchange Commission was to submit to each House of Congress any recommendations the Commission considered appropriate with respect to further revision of subsection (b)(6) of this section.
EXECUTIVE DOCUMENTS
TRANSFER OF FUNCTIONSFor transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.
- Administration
- the terms "Administration" and "Administrator" mean the Small Business Administration and the Administrator thereof, respectively; and